Horizon Lines reports increase in profits

Horizon Lines said it had a third-quarter profit of $1.6 million, compared to $1.4 million in the third-quarter of 2012. Revenue was $273.7 million in the third quarter, compared to $279.6 million one year earlier, while adjusted EBITDA was $35 million, compared to $27 million in the 2012 period.
Sam Woodward, president and chief executive officer of Horizon, said the EBITDA improvement was "driven largely by reduced vessel charter expense, increased non-transportation revenue, lower dry-dock transit and crew-related expenses, and reduced overhead. The factors driving adjusted EBITDA growth were partially offset by reduced fuel recovery and certain contractual and inflationary increases in operating expenses, more than offsetting a modest improvement in rates, net of fuel."
Container volume for the third quarter totaled 59,059 revenue loads, down 4 percent from the 61,514 loads for the same period a year ago. The decline was primarily the result of the reduced number of sailings between Jacksonville and San Juan.
Unit revenue per container totaled $4,236 in the third quarter, compared with $4,245 in the 2012 period. Third-quarter unit revenue per container, net of fuel surcharges, was $3,263, up 1.4 percent, year over year, from $3,218.
Vessel fuel costs averaged $642 per metric ton in the third quarter, 1.1-percent below the average price of $649 per ton in the same quarter a year ago.
Discussing the outlook for the full year Horizon said, "Management expects 2013 revenue container volumes to be below 2012 levels primarily due to the elimination of one weekly sailing from Jacksonville, Fla., to San Juan, Puerto Rico. The June 2013 addition of a bi-weekly Jacksonville sailing to our southbound service between Houston, Texas, and San Juan is allowing us to capture incremental volumes while utilizing an in-service vessel. We expect revenue container rates to increase marginally, and these increases are necessary to partially mitigate increases in expenses associated with our revenue container volumes, including our vessel payroll costs and benefits, stevedoring, port charges, wharfage, inland transportation costs, and rolling stock costs, among others."
According to Horizon, "During 2012, the company incurred considerable expenses associated with the dry-docking of our Puerto Rico vessels in Asia. Although we are dry-docking four of our West Coast vessels in 2013, and we dry-docked four vessels in 2012, the expenses will be significantly lower in 2013 due to the much shorter transit and out-of-service times for our West Coast vessels."